The Deal Is Dead, and That May Be That for a While

I will admit it here first, I am surprised. The Delta-US Airways deal appears to be dead. I mean…I’m not surprised that the “deal” that was originally proposed by US Airways management has fallen by the wayside…. but I really did think that a “deal”…some deal would be done. There is just way too much money floating around out there waiting to be spent.

While I think Delta-US Airways could’ve been a challenge to get through anti-trust approval, I certainly think it could’ve been done. There will likely not be an administration that is as business friendly as this one for sometime to come. Again, it would’ve been challenging, but it could’ve been done.

The business reasons for combining with another airline while that airline is in bankruptcy are compelling. The ability to offload under utilized assets, re-write vendor agreements, and yes, labor agreements are just not available outside of bankruptcy court. It’s hard to unlock that much value otherwise.

So…the deal is dead, and I bet that industry consolidation is too…at least for now.

Marshall Jackson is an aviation enthusiast and avid cruiser. After 10 years in the airline business, Marshall moved on to a new career that includes plenty of travel and plenty of cruises, and that’s just the way he likes it.